Jefferies’ India autos and auto parts team has maintained a ‘Buy’ rating on Belrise Industries with a revised price target of Rs 250, implying a 19% upside from the previous close of Rs 210.50. The target price has been increased from Rs 215 and is based on 26x FY28 estimated earnings per share (EPS).

The upgrade in target price comes on the back of in-line March quarter performance and a positive medium-term earnings outlook. For the March quarter, Belrise’s EBITDA and profit after tax (PAT) rose 5% and 17% year-on-year, respectively, broadly in line with Jefferies’ estimates. Total operating income grew 12% year-on-year to Rs 25,528 million, driven by a robust 21% year-on-year increase in manufacturing revenues, even as trading revenues declined 21%. Manufacturing revenue growth was led by an 18% increase in the two- and three-wheeler (2W+3W) segment, 32% in commercial vehicles (CVs), and 70% in passenger vehicles (PVs) from a low base.

EBITDA margin in the March quarter contracted 90 basis points sequentially to 11.4% on account of higher “other expenses”, including a one-off cost linked to an overseas acquisition. Jefferies noted that 4Q “other expenses include a one-time start-up cost of Rs 95 mn (40 bp of revenues) to overhaul machinery, legal and professional expenses, and personnel expenses relating to the acquisition of SDM in France.” Despite near-term cost pressures from higher commodity, fuel, transportation, and labour costs, the brokerage said Belrise still expects FY27 margins to be broadly similar to FY26, supported by cost pass-through to customers and internal cost controls.

For FY26, Belrise’s revenues grew 15% year-on-year to Rs 95,091 million, EBITDA rose 13% to Rs 11,538 million and recurring PAT jumped 41% to Rs 5,020 million, with EBITDA margin at 12.1%. The company has also sharply strengthened its balance sheet, with net debt-to-EBITDA down to 0.1 times in FY26, compared with 1.0 times in FY25. Jefferies expects Belrise to deliver a 26% CAGR in EBITDA and 30% CAGR in EPS over FY26–28, aided by organic growth and earnings accretion from the planned merger of group entities in FY28.

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The brokerage highlighted strong new order traction as a key driver of its positive view. Belrise has won two new orders: one for exhaust systems and fuel tanks for a top-selling model of a 2W/3W OEM, which Jefferies believes is from TVS Motor, and another for exhaust systems and other components for a Japanese OEM. These programmes are slated to start production in 2QFY27 and 4QFY27, and “should add ~Rs3bn of annual revs on full ramp-up (~3% of FY26 top line),” the report said.

Aerospace diversification

Jefferies also underscored Belrise’s strategic moves to diversify beyond its core two-wheeler business into higher-value global niches. “With two recent acquisitions in France and the UK, Belrise has entered into [the] global aerospace components supply chain,” the analysts wrote, adding that the company has “also entered into a strategic agreement with an Israeli company to jointly pursue opportunities in defence.” While revenue contributions from aerospace and defence are likely to remain modest in the near term, Jefferies believes they “have the potential to meaningfully boost growth in the medium to long term.”On the demand side, Jefferies expects Belrise to benefit from a cyclical upturn in India’s two-wheeler market. The brokerage projects India’s 2W production to grow at a 9% CAGR over FY26–29, supported by the impact of the GST cut in September and a recovery in domestic demand, though it flagged higher retail fuel prices and a weak monsoon as potential headwinds. Belrise, established in 1996, is described as “one of India’s leading 2W metal component players”, with about a 24% market share in its key product categories of chassis and exhaust systems. The company derives about 65% of its revenues from 2W components, around 10% from four-wheelers and roughly 20% from commodity trading.

At the current market price, the stock has already delivered a strong run-up, gaining 14% calendar year-to-date and outperforming the Nifty 50 index by 22 percentage points. Jefferies acknowledged that Belrise’s valuation at 29 times FY27 estimated earnings “appears rich”, but argued that it is “justified given healthy growth and an expanding business footprint.” The revised target price of Rs 250 factors in this growth trajectory and is anchored on a 26 times multiple on March FY28 earnings per share.

Jefferies, however, cautioned investors about key risks to its positive thesis on the stock. Chief among them is Belrise’s high dependence on its top customer, “which, based on industry characteristics, we believe is Bajaj,” the report said. Other risks include weaker-than-expected two-wheeler demand and higher-than-anticipated pressure on margins from input costs and competition. Even so, the brokerage summed up its stance by stating: “We maintain a Buy with a Rs 250 TP (Rs 215 earlier), based on 26x FY28E PE,” reflecting confidence in “healthy growth and an expanding business footprint” across 2Ws, 4Ws, exports, aerospace and defence.